Which two ratios are used in the DuPont system to create return on assets?
A) Return on assets and asset turnover
B) Profit margin and asset turnover
C) Return on total capital and the profit margin
D) Inventory turnover and return on fixed assets

Question

Quizplus · Accepted Answer

The DuPont system combines two ratios to create return on assets: profit margin (net income divided by total revenue) and asset turnover (total revenue divided by average total assets). Therefore, the correct answer is B, which includes both of these ratios.

Which Two Ratios Are Used in the DuPont System to Create